The Powered Communities report revealed that the UK food and drink manufacturing sector contributed £37 billion to the UK economy and provides nearly 500,000 jobs. Over the last decade, the sector has grown 17.9% and now accounts for almost a quarter (24.2%) of total UK manufacturing turnover.
Employment in the sector is growing, with 41,000 new jobs across the UK since 2018. The number of food and drink manufacturing businesses in the UK also rose 14% between 2019 and 2024.
However, the cavalcade of challenges facing the industry has significantly impacted manufacturers’ confidence – down to 47% in Q4 2024 on account of growing inflationary pressures, barriers to trade and upcoming Extended Producer Responsibility (EPR) fees for packaging.
Vital to UK food system
Jim Bligh, FDF director of corporate affairs, communications and packaging, argued that the food and drink manufacturing industry was vital if the UK wanted a thriving food system that provided high-quality, affordable food.
“We are a major part of the UK’s wider manufacturing sector, offering good careers, driving investment, and promoting international trade,” he added. “Food and drink manufacturing is uniquely placed to make a positive impact in every village, town and city in every constituency in the country.”
“But with food and drink businesses under increasing pressure, we’ve reached a pivotal moment where government must act to safeguard this foundational sector’s future growth and the UK’s food security. We’ve set out more than 40 steps government can take to remove unnecessary roadblocks to growth for the benefit of every community in the UK.”
FDF has urged government to take decisive action to address barriers to growth to ensure the sector’s future health. These included low investment in innovation, falling food and drink export volumes and lack of access to highly skilled talent.
Key asks
The Powered Communities report set out more than 40 steps that the government could take to secure a thriving food and rink industry, with six keys asks from the industry.
- Secure a fair share of the UK’s R&D spend for food and drink manufacturing, to support industry investment in new product development and healthier options for consumers and the transition to net zero.
- Co-create a workforce and skills plan with Skills England to support our industry as we transition to a higher-skilled, higher-wage workforce. This would be an investment in communities in every place and region of the UK.
- Simplify the R&D tax credits system to help more businesses that are struggling to invest in technology to improve productivity and to innovate healthier products.
- Ringfence the £1.4bn annual cost of Extended Producer Responsibility (EPR) to ensure these fees are only used on improving the UK’s recycling infrastructure and not to fund local authority funding gaps.
- Prioritise a more strategic approach to EU trade relations to revive falling EU exports, which are down more than a third since Brexit.
- Simplify regulations and remove unnecessary red tape to help business, in particular our 12,000 SMEs, focus on growth and productivity.
Meanwhile, US president Donald Trump’s suite of tariff increases on all products imported into the country has been met with derision by the UK food and drink industry and has sparked uncertainty of future trade with the global superpower.